Greek Banks Are Now Facing A Run On Their Deposits

A branch of the Greek central bank. Bank deposits are falling rapidly. AFP

Anxious Greeks Emptying Their Bank Accounts -- Spiegel Online

Many Greeks are draining their savings accounts because they are out of work, face rising taxes or are afraid the country will be forced to leave the euro zone. By withdrawing money, they are forcing banks to scale back their lending -- and are inadvertently making the recession even worse.

Georgios Provopoulos, the governor of the central bank of Greece, is a man of statistics, and they speak a clear language. "In September and October, savings and time deposits fell by a further 13 to 14 billion euros. In the first 10 days of November the decline continued on a large scale," he recently told the economic affairs committee of the Greek parliament.

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More News On Greek Banks Facing A Run On Their Deposits

Greek Banks' Losses Worsen as Customers Withdraw Deposits -- Bloomberg Businessweek
Greek Bank Withdrawals Accelerated Amid Political Instability -- Bloomberg
Greek bank deposit outflows in Sept-Oct hit 13-14 bln euros -- Financial Mirror
Greek banks suffer surge in withdrawals -- Financial Times

My Comment: I saw this happen to Russian banks in 1992 .... it is not a pretty sight to see. If today's Greek run on the banks spreads to a bigger country like Italy or Spain .... the Euro crisis has just increased exponentially to an unsustainable level.